Directors suspected of serious breaches of company law will find themselves arrested and questioned by the Garda following the establishment of a new enforcement agency today.

The Office of the Director of Corporate Enforcement (ODCE), which will have a complement of seven garda∅ on its staff along with solicitors, accountants and administrators, can also seek to have people barred from being directors if they are found to have had a number of defaults in relation to their obligations under company law.

These powers, which the ODCE takes on from today, are likely to be used against businessmen linked to the investigations by High Court inspectors into the Ansbacher deposits and NIB. The Ansbacher inquiry is expected to be completed shortly.

Mr Paul Appleby, the new director, told journalists yesterday that he personally knew of no instance where a person had been arrested and questioned by garda∅ in relation to a suspected breach of company law.

From today, persons suspected of serious breaches of company law can be arrested by officers from his office and brought to a Garda station to be questioned for up to 12 hours.

This would occur in cases of serious offences such as fraudulent trading, failing to keep proper books of account, and insider trading, Mr Appleby said.

Upon completion the reports by the High Court inspectors will be passed on to Mr Appleby's office by the High Court and he will decide what further actions are required. Both investigations have been asked to identify possible breaches of company law which have been discovered.

Early next year the ODCE will be given powers not previously available to the State to seek to bring an end to the "phoenix syndrome", the practice whereby directors strip a company of its assets before starting up a new company to conduct a similar business.

Mr Appleby will be given the power to apply for court orders to seek and acquire property which might be returned to an insolvent company; to seek arrest warrants for directors who may be about to leave the State; and to seek freezing orders here or abroad against the assets of companies or the directors of insolvent companies.

These powers will be aimed at "getting rid of the problem of phoenix companies", Mr Appleby said. "For the first time, perhaps, serious powers are available to tackle it."

Other significant roles which the new office will take on next year include the reviewing of liquidators' reports and the general supervision of liquidators and receivers. Liquidators of insolvent companies will be required to apply to the High Court for the restriction of directors of such companies unless exempted from doing so by the director.

Auditors, liquidators and professional bodies will have to report suspected breaches of company law to the new office. "Professional people such as auditors and liquidators are performing a public interest role and we will be piggy backing on the work they do," said Mr Appleby. Other agencies such as the Garda, the Revenue Commissioners and the Competition Authority will be allowed to convey information to the new office.

The Tβnaiste, Ms Harney, welcoming the establishment of the new body, said she now expected that "company law will be vigorously enforced in Ireland for the first time ever".

The chief executive of the Institute of Chartered Accountants in Ireland, Mr Brian Walsh, welcomed the establishment of the office and called on Mr Appleby to make it a top priority to communicate the role and functions of his office. He said he believed the majority of company directors were not aware of the provisions of the Company Law Enforcement Act.

"In the past, enforcement of company law has been patchy and very reactive. An effectively regulated business environment is good for business and good for the consumer," he said.